FXStreet (Delhi) – Research Team at Investec, suggests that the US inflation reading was roughly as expected - passing the last major obstacle before tonight's US FOMC meeting. Key Quotes “With the required job gains across the pond being acknowledged by Fed Chair Janet Yellen, and core inflation sitting around the Fed's 2% target (stripping out the deflationary impact of lower energy prices that should mainly act to make consumers financially better off), the Fed seem set to raise interest rates tonight. Financial swap markets have priced in a nearly 80% chance of a first interest rate rise since June 2006 in the US at tonight's FOMC monetary policy meeting.” “Beyond the 'will they, won't they' of the initial rate rise, the perhaps more important element of tonight will be the path the Fed lays out for further interest rate hikes, namely the timing and amount. Therefore the three key things to watch will be the 'Dot Plot' of Fed future rate hike expectations; the tone of the accompanying statement and press conference from Fed Chair Janet Yellen; and the Fed's future economic growth and inflation projections.” “Finally the tail risk to the event seems to be the continuing fall to fresh lows in oil prices keeping inflation low. Previously seen by the Fed as 'Transitory' in nature, we are now 18 months from the highs in oil prices and still falling at multi-year lows as OPEC continue to keep prices subdued through over-supply in an effort to retain market share and shake out new Shale Gas competition.” For more information, read our latest forex news.